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The Innovation Dividend of Defense R&D

Author

Listed:
  • Enrico Moretti
  • Claudia Steinwender
  • John van Reenen

Abstract

Research & development (R&D) subsidies, especially defense R&D spending, raise private R&D investment (a crowd-in effect)Public R&D funding increases employment without driving up wagesSupported industries see gains in productivityInternational spillovers amplify the impact across countries, underscoring the case for international coordination – particularly within the EUDirect subsidies outperform tax credits in boosting total R&D

Suggested Citation

  • Enrico Moretti & Claudia Steinwender & John van Reenen, 2025. "The Innovation Dividend of Defense R&D," EconPol Forum, CESifo, vol. 26(03), pages 46-51, July.
    • Handle: RePEc:ces:epofor:v:26:y:2025:i:03:p:46-51
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    References listed on IDEAS

    as
    1. Nicholas Bloom & John Van Reenen & Heidi Williams, 2019. "A Toolkit of Policies to Promote Innovation," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 163-184, Summer.
    2. Goolsbee, Austan, 1998. "Does Government R&D Policy Mainly Benefit Scientists and Engineers?," American Economic Review, American Economic Association, vol. 88(2), pages 298-302, May.
    3. Ruttan, Vernon W., 2006. "Is War Necessary for Economic Growth?: Military Procurement and Technology Development," OUP Catalogue, Oxford University Press, number 9780195188042.
    4. Enrico Moretti, 2004. "Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions," American Economic Review, American Economic Association, vol. 94(3), pages 656-690, June.
    5. Lichtenberg, Frank R, 1984. "The Relationship between Federal Contract R&D and Company R&D," American Economic Review, American Economic Association, vol. 74(2), pages 73-78, May.
    6. Nicholas Bloom & John Van Reenen & Heidi Williams, 2019. "A toolkit of policies to promote innovation," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 10.
    7. Enrico Moretti, 2021. "The Effect of High-Tech Clusters on the Productivity of Top Inventors," American Economic Review, American Economic Association, vol. 111(10), pages 3328-3375, October.
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